Indonesia's Debt-to-GDP Ratio and Economic Growth during the Jokowi Era

Economics & Macro

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Erlina Fury Santika 17/09/2024 13:22 WIB

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Data boxes compile Indonesia's debt-to-GDP ratio and economic growth over a decade, or the presidential term of Joko Widodo (2014-2024).

Indonesia's Debt-to-GDP Ratio and Annual Economic Growth (2014-2023*)

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Indonesia's Debt-to-GDP Ratio and Annual Economic Growth (2014-2023*)

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The Center of Economic and Law Studies (Celios) has identified ten major fiscal issues during the two terms of President Joko Widodo (Jokowi). Jokowi's term is set to end in October 2024.

According to *Katadata*, these fiscal problems include stagnant economic growth; a widening budget deficit; an increasing debt ratio; a declining tax ratio; lower investment financing compared to debt financing; weak growth in social protection spending; anomalies in state capital participation in state-owned enterprises (SOEs); still low environmental protection spending; the development of the new capital city (IKN); and a narrowing fiscal space.

*Databoks* compiled two key fiscal highlights: the annual debt-to-Gross Domestic Product (GDP) ratio and annual economic growth over the past nearly ten years.

Celios notes that Indonesia's economic growth has stagnated at 5%. The highest economic growth in the last decade occurred in 2022 at 5.3%, while the lowest was in 2020 at -2.07%.

(See also: Indonesia's Economy Grows 5.05% in Q2 2024)

The latest data from the Central Statistics Agency (BPS) shows economic growth in Q2 2024 reached 5.05% compared to Q2 2023.

Based on current prices, GDP reached Rp5,536.5 trillion during that period. Measured in constant prices, Indonesia's Q2 2024 GDP reached Rp3,231.0 trillion.

Meanwhile, Celios states that Indonesia's debt-to-GDP ratio surged from 24.68% in 2014 to 39% in 2023, a jump of 58.42%.

As of July 2024, Indonesia's nominal debt reached Rp8,502.69 trillion (approximately Rp8.5 quadrillion). The debt-to-GDP ratio at that time was 38.68%.

(See also: Indonesia's Debt-to-GDP Ratio)

"Fiscal policy over the past decade has not shown substantial improvement in strengthening the national economic base," said Celios Public Policy Director Media Wahyudi Askar, explaining the fiscal problems of the Jokowi era on Thursday (September 12, 2024).

Media added that a deep understanding of current macroeconomic conditions is crucial, especially in building a more responsive fiscal framework. As a result, Jokowi is leaving behind a very heavy state budget (APBN).

"Our APBN is not luxurious. Jokowi is not only leaving behind his children but also incredible chaos in fiscal governance in Indonesia," said Media.

(See *Katadata*: List of 10 Fiscal Problems of the Jokowi Era that Prabowo Will Inherit)

Editor : Erlina Fury Santika

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."